This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

KLA-Tencor Practicing Patience

KLA-Tencor (KLAC - Get Report) CFO John Kispert says his company is prepared for any antitrust issues that may surround a possible takeover of August Technology (AUGT), despite its target's cries to the contrary.

"We're comfortable, otherwise we wouldn't be pursuing this," Kispert said during an interview at the company's San Jose, Calif., headquarters last week.

KLA-Tencor has held the wild-card role during the past six months as August first scuttled a merger with Nanometrics (NANO - Get Report) and then inked a deal with Rudolph Technologies (RTEC - Get Report).

But the Nanometrics and Rudolph transactions both represented below-market takeout prices. August announced last week a merger with Rudolph at a price of $10.50 a share, even though August hasn't closed below $10.50 since mid-February.

KLA-Tencor has offered to pay $11.50 in cash for August but has also said it could use stock instead. August executives have cited potential regulatory hurdles as a primary barrier to doing a deal with KLA-Tencor.

However, Kispert said KLA-Tencor is working with the Department of Justice regarding its bid for August, while noting that KLA-Tencor has cleared regulatory obstacles for past acquisitions.

The fight for August -- now in its sixth month -- doesn't seem to be close to ending. August and Rudolph have only just begun the process of regulatory filings and antitrust reviews, with a shareholder vote not occurring until after that.

It's that vote that will likely be the toughest hurdle to overcome for August. The trading pattern of the company's stock indicates that investors are expecting even more than KLA-Tencor's high bid from August's ultimate buyer. The recent spate of buying in August shares has lifted the stock as high as $12. They closed Monday at $11.89.

As for breaking apart the Rudolph/August deal, the companies set a $7.74 million breakup fee, less than the termination penalty of $8.3 million triggered to end the Nanometrics deal.

Kispert says he wasn't surprised by August's deal with Rudolph, but he maintains that KLA-Tencor still has the interest and ability to acquire August, regardless of how long it takes. "We do not want to dawdle, but we need to be patient to do this correctly," said Kispert.

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG
KLAC $58.89 -0.78%
NANO $16.09 0.75%
RTEC $13.39 7.10%
AAPL $130.27 0.24%
FB $82.23 2.20%

Markets

DOW 18,098.23 +86.29 0.48%
S&P 500 2,114.51 +4.91 0.23%
NASDAQ 5,099.4010 +22.8770 0.45%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs